Profitability depletion

As can be seen in Table 2 all revenues less expenses associated with selling are summed in Row 17. All expenses including noncash expenses such as depreciation, amortization, and depletion are summed in Row 30. The net profit before tax, Row 32, is obtained by subtracting Row 30 from Row 17 and making any inventory adjustment required. Row 34 is the cash taxes that are to be paid unless offset by investment or energy tax credits in Row 36. The deferred income tax is shown in Row 35. The deferred tax decreases the net profit after tax in the early years and increases the net profit after tax in later years. The impact on cash flow is just the other way around as discussed later. Row 37, profit after tax, is obtained as foliow s ... 

Depreciation, amortization, depletion, and investment credit are all factors that affect the taxes a company must pay, and hence the profit that can be made. When the government wishes industry to change its direction, it can manipulate these factors to make certain options more profitable. The engineer must be aware of these changes, since they can be the deciding factor on whether a project should be continued. 

Many definitions of sustainable agriculture are reported by literature, but all are related to the basic concept of a profitable crop production with no environmental pollution and depletion of farm and natural resources, including effects on soil, water, and biodiversity (Doran 2002 Francis et al. 2006). Soil solarization seems to fit the fundaments of sustainable agriculture as providing an effective and environmentally safe control of many soilbome pests and more competitive market positions and higher prices to pesticide-free products. 

Under ordinary circumstances crops cannot be specially grown for the sake of their potash since the soil would be rapidly depleted of this valuable constituent. In special districts, however, it may be profitable to burn wood in pits sheltered from the wind, and extract the ashes with water. 

Chemical kinetics is a subject of crucial environmental and economic importance. In the upper atmosphere, for example, maintenance or depletion of the ozone layer, which protects us from the sun s harmful ultraviolet radiation, depends on the relative rates of reactions that produce and destroy O3 molecules. In the chemical industry, the profitability of the process for the synthesis of ammonia, which is used as a fertilizer, depends on the rate at which gaseous N2 and H2 can be converted to NH3. 

But in some case this technique is absolutely necessary to develop very low permeability aquifers, for example in carbonates. However, they are profitable for most of the very low permeability depleted fields to be converted into storage facilities. 

Economic Issues (Profit). It is obvious that if scarce nonrenewable resources such as fossil fuels and rich metal ores are going to be depleted, prices will become extremely high. Therefore, economics is very important in sustainable development. This is also true for the feasibility of sustainability concepts If they are not profitable, then they will not be accepted. However, it is very important to think over the meaning of the term profitability. Indeed, if external costs are taken into account, sustainable technology will be more profitable in the long term than conventional technology. 

Economy/profit Scarce resource depletion Drinking water resource depletion Fossil fuel depletion External (future) cost low Capital expenditure Operational cost Profitable over total lifecycle... 

Economy/profit Scarce resource depletion Drinking water resource depletion Fossil fuel depletion External (future) cost low Lower capital expenditure Lower operational cost Profitable over total lifecycle To be assessed for each case Not identified yet Yes improvement factor > 4 Yes Yes factor > 4 Yes factor > 4 Likely... 

Frmds are continually required for equipment replacement, land improvement, and plant expansion, when economic conditions are favorable. Because funds for a project were originally provided by management, the division must return them as depreciation or depletion. Also, use of their capital management requires a profit. The sum of profit and depreciation or depletion constitutes cash flow. 

In Other Value Added (Table 4.4b) is property-type income, which is a composite of several factors, including proprietor s income, rental income of persons, corporate profits, inventory valuation adjustment, net interest, business transfer payments, surplus of government enterprises less subsidies, and capital consumption allowances (depreciation, depletion, and amortization). As expected, property-type income is highest for sector 7 IB, real estate. The depreciation part of property-type income accounts for the high values of some of the CPI sectors (e.g., 27 and 29). The depletion part of property-type income accounts for the moderately high values of sector 8, crude petroleum and natural gas. 

Drilling costs depends on the depth to be drilled as well as the nature of the rocks (hard or soft). Other factors are the distance from water and other supplies, method of transport and access to the site. In foreign countries royalties and other profit-sharing expenses or taxes may deplete 50% of the net profit and more. 

Income Tax Expenses. This represents a considerable expense to a profitable company. Table 6-20 shows that the average income tax for chemical companies is 62 per cent of gross earnings. The tax on earnings of the extractive, mining, and petroleum companies is somewhat less than this because of depletion allowances on their natural resource reserves. 

The cash flow statement, also called the consolidated statement of cash flow or statement of consolidated cash flow is a summary of the cash flow of a company over a given period of time. The cashflow equals cash receipts minus cash payments over a given period of time or equivalently, net profit plus amounts charged off for depreciation, depletion, and amortization. These latter three items are added back because they do not represent any cash transactions. Depletion, which is similar to depreciation, accounts for the exhaustion of natural resources such as oil, timber, and minerals. The cash flow statement is a measure of a company s financial health and, in recent years, has become a very important feature of the annual report. 

A mining property, containing an estimated 900,000 tons of lead and zinc ore, is purchased for 4,500,000. In the first year of operation, 100,000 tons of the ore is mined and sold for 20/ton. The expenses that year are 1,200,000. Calculate the net profit and cash flow by (a) cost depletion and (b) percentage depletion. 

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